But when when you try to recreate the success of those case studies or those tools? Results are mixed at best.

Why is this? Because relying on tools and case studies means you are taking a grab bag of tactics and bolting on a strategy. Then hoping it works as well as those who shared the original case study.

And they fail every single time.

Because hope is not a strategy. (Bonus points if you can name the political figure who coined that phrase).

Do this enough times, and you will start to agree that an approach of “Tactics, then strategy” is a recipe for failure.

Then why do we do the same crap when it comes to budgeting?

Marketing budgets are a funny thing.

You can talk to a hundred marketers, and get a hundred answers on how budgeting works for companies.

From my experience, most marketers are absolutely clueless as to how companies approach annual budgeting.

When marketing doesn’t understand finance, asking for budget is a painful approach for the marketer and the CFO alike.

It’s painful for the marketer, because it represents time spent not doing marketing. And there is a high likelihood of rejection.

For the CFO, it’s painful because it’s usually a big bag of bullshit tactics.

“Give me budget because I saw in this case study we could get 10,000 leads a day with SEO. Backlinko said so.”

Note, I respect Backlinko immensely and his techniques work. But copying his results is not a strategy.

“Give me budget because I heard that this tool is an all-in-one solution to our problems!”

Your CFO can see through this. They probably will not give you money to follow the crowd. They may not articulate why they are saying no, but no is what they will probably say.

And it hurts. Trust me, it hurts.

Hearing yes more often

There is a question that has been on mind a lot lately.

Why is marketing treated as a cost center?

Why should we have a budget for marketing at all?

If the ROI of our marketing activities is the 1,000% we see in our vendor reports, why wouldn’t we be given an infinite budget to literally print money?

Because our numbers are probably bullshit naive. They don’t count in the cost of goods sold, gross margins, industry standards for marketing expense ratios or whatever metric that your company uses to measure success.

Rather than ramble about these differences, here is a picture to help explain.

We see the world very differently.

The two numbers everyone understands (even if it still requires a translator)

There are a lot of buzzwords, metrics and vendor-guided bullshit success measures that we use as Marketers. Many of the terms we use are guided by the vendors we choose to advertise or measure our programs.

Yet of the words we use in marketing, only two of these terms are used by the finance department. And even then, digital marketers barely use them (unless they are selling products online).

These terms are income and expenses. Or as we call them in marketing, revenue and budget (or ad spend or whatever you want to call it).

The picture above depicts where our worlds overlap.

As a marketer, you may have heard (or seen) the other finance definitions before. They are common accounting terms that I pulled directly from Quickbooks.

How marketers can get more budget traction

Now it’s time to get into the subject of the video at the beginning of this post. In this video, I talk about the problem that we all face with getting marketing budgets. Then we get into an approach that you can use to secure more budget for your initiatives.

We walk through how we can do a better job of estimating the budget we will need to succeed, and the revenues that will come from this investment. We use competitive intelligence tools to come up with a budget and revenue projection that makes sense to both marketing and finance.

Tools we use in our video

You will really want to watch the video to see what we can find in these tools. Let’s assume you have already assembled some competitive data.

What do we do with this data?

Triangulate your data sources into three points:

Your actual numbers from Google Analytics (or Adobe)

Your industry numbers from GA and Similarweb (anonymous)

Your specific competitor numbers from SimilarWeb and SEMRush

Use this data to project your marketing budget by providing several, well researched options.

We need our own data to serve as a baseline of what has happened. It anchors our data when we use anonymous benchmarks and when we project competitor budgets.

We need anonymous numbers benchmarking our industry, because these help us establish industry-wide rates of adoption for our marketing and advertising programs.

And we need specific competitor data to get specific numbers for companies we have in our targets.

What types of numbers should we generate?

Now that you have collected masses of data about your company and competition, what do you do with it? I recommend that you come up with three types of projections.

1) Generate a Low Watermark

To set the tone for the rest of your spreadsheet, use your own numbers. I call this a “low watermark” budget, because it represents how your marketing may perform if you make no effort at all.

2) Generate a Medium Watermark

This one takes the most finesse, because it involves creating a model for how you think your competitor is budgeting their marketing efforts. How much are they spending on marketing? How much revenue is this creating.

We will share some ideas on how to pull this together below, but just know that this work can be quite difficult to pull together and lead to disagreement in your organization.

3) Generate a High Watermark estimate

What will happen if we shoot for the moon? What will it look like if we try to corner the entire market?

For each of these areas, we need to project expenses, revenues and profits.

Expense projections

Project your expenses using your previous year budget as the low watermark (the result if we do nothing) and then follow our instructions below.

1) For low watermark numbers, you should be using the numbers for your own company. Start with previous year if you are lost. If your company does not provide you with this information, then the best you will have to go on is what you find about your company in competitive intelligence tools.

2) Gather competitive intelligence on spend through tools like Similarweb, SEMRush, etc. These tools will estimate both traffic for competitors and media spend as well.

These numbers are not perfect, but can serve as a rough guideline. For search data, you may also get insights from the Google AdWords keyword tool. Multiply their searches by an average Click Through Rate times estimated CPC to determine budget (if un-throttled all year). Adjust to something that makes sense based on what you see in other tools.

If you have never used Google AdWords, then I recommend my PPC Course as a starting point.

3) You will have to use your imagination in order to determine expenses for SEO, Email, Content, etc. While there are fixed costs involved with these services (you can figure out how much they pay their email provider), they are also labor intensive, and those expenses should factor into your calculation.

I recommend comparing your own efforts/expenses and results to those of the competitor. If they have twice the results, then assume they spend twice as much. While this doesn’t factor in optimization of conversion rates and brand value, it is a starting point.

Sometimes that is all we have. If you are not doing any of this marketing, then you may need to start with the cost of a proposal of services for a provider to figure out what it would cost for you to make this investment and understand market rates.

4) Add rows to the above spreadsheet to match your marketing situation and ambitions. There are other forms of marketing that may not be represented here. Make this sheet your own.

5) Project your Facebook and remarketing budgets in a similar way to your paid search. The tools will be different (FB Ads, Display planner, etc.), but the methodology is the same. Start with your own data, then supplement with whatever else you can find about your competition and industry trends.

6) Don’t fixate on getting this “right” marketing projections are NEVER RIGHT. They are usually off by several magnitudes of reality. But this is all we have to go on. From my experience, you will not receive the budget you seek by playing it safe or being overly conservative.

You are not competing against whether “Marketing is a good idea”. You are competing against “Whether this is where we want to focus our efforts”. In that sense, this is an investment of time, money and human capital for your company. They need to know if this is the best investment of those items, compared to other options.

Revenue projections

1) The low watermark should use your data for the most recent 12 months of sales. Or, if you are on a strong “run rate” of revenue, project your current run rate for the next 12 months.

2) For competitor run-rates, you’ll need to either figure out their conversion rates, or use your own conversion rate to figure out their sales proportions. For example, if you get a 2x return on your AdWords, then that can be your competitor baseline.

If you think they are more efficient, then adjust the rate. If you think they are less efficient, because of they can’t scale with as much spend, adjust downward.

3) For some of these numbers, you are just plain guessing. But at least with the competitive data, you have an educated guess. That is what this spreadsheet helps you achieve.

4) Finance (or whoever approves your budget) is not going to like it if you guess, but they are also more helpful than you think. One of the things I like to do is bring this spreadsheet into a working meeting where we work to find numbers everyone can agree on.

Have them give you input into something that they think is more realistic. Or have them give their wisdom on how they might do this. When finance is involved with generating the projections, they are more invested in seeing it succeed.

5) If you are worried about projecting revenue, consider this.

Would a company fire an employee who tries too hard to become successful or the person who is way too comfortable with status quo?

And if your company did fire you for being too ambitious, was that the right company anyway?

Showing your profit potential

This is actually the easy part. You understand expenses and revenues, so the third sheet simply calculates your profit potential.

The same for the chart. All that you need to do is fill the first two sheets out, and this chart will generate automatically as well.

Share with your organization

Now that you have put together a profit model, you can share with your organization. They can understand better what you are looking to achieve, and how much revenue you expect to get from the results.

This can be simply sharing the spreadsheet that you have created and the chart, or it could be a full out presentation of your findings. You know how your company operates, and how much detail is needed to get your ideas adopted.

The final step: start hearing yes more often!

That is the goal of all of this. To hear yes more often to your budget requests. To stop asking your company to support your never ending bag of tactics.

Really, going through this exercise is creating a strategy for how you will operate moving forward!

You can still assign budget to the tactics you have read, or the tools that you “must have” in your repertoire. In fact, I highly recommend that you do this. I recommend assigning 10-20% of your budget to just doing cool stuff! But the rest of your numbers will need to support this.

Test and learn budgets (like what we saw with display advertising in our video), are how we ensure success well into the future.

The best part? By taking a strategic approach to budget allocation, you might find yourself with more budget for tools and tactics than you can handle!